Buried somewhere under four feet of mud and rubbish, in the Docksway landfill site near Newport, Wales, in a space about the size of a football pitch is a computer hard drive worth more than £4m.

It belonged to James Howells, who threw it out when he was clearing up his desk in mid-summer and discovered the part, rescued from a defunct Dell laptop. He found it in a drawer and put it in a bin.

And then last Friday he realised that it held a digital wallet with 7,500 Bitcoins created for almost nothing in 2009 - and then worth about the same.

"You know when you put something in the bin, and in your head, say to yourself 'that's a bad idea'? I really did have that," Howells, who works in IT, told the Guardian. "I don't have an exact date, the only time period I can give – and I've been racking my own brains – is between 20 June and 10 August. Probably mid-July". At the time he obliviously threw them away, the 7,500 Bitcoins on the hard-drive were worth around £500,000. Since then, the cryptocurrency's value has soared, passing $1,000 on Wednesday afternoon.

In 2009, a few months after Bitcoin's launch, it was comparatively easy to 'mine' the digital currency, effectively creating money by computing. Photograph: Rick Bowmer/AP

Although Bitcoins have recently become part of the zeitgeist – with Virgin saying it will accept the currency for its Virgin Galactic flights, and central bankers considering its position in finance seriously – Howells generated his in early 2009, when the currency was only known in tech circles. At that time, a few months after its launch, it was comparatively easy to "mine" the digital currency, effectively creating money by computing: Howells ran a program on his laptop for a week to generate his stash. Nowadays, doing the same would require enormously expensive computing power.

That lost hard drive, though, contains the cryptographic "private key" that is needed to be able to access and spend the Bitcoins; without it, the "money" is lost forever.

And Howells didn't have a backup.

Howells stopped mining after a week because his girlfriend complained that the laptop was getting too noisy and hot while it ran the programs to solve the complex mathematical problems needed to create new Bitcoins.

In 2010, the Dell XPS N1710 broke after he accidentally tipped lemonade on it, so he dismantled it for parts. Most were thrown away or sold, but he kept the hard drive in a desk drawer for the next three years – until that fateful summer day when he had the clearout.

Howells didn't realise his mistake until Friday. Since then, he said, "I've searched high and low. I've tried to retrieve files from all of my USB sticks, from all of my hard drives. I've tried everything just in case I had a backup file, or had copied it by accident. And … nothing."

He even went down to the landfill site itself. "I had a word with one of the guys down there, explained the situation. And he actually took me out in his truck to where the landfill site is, the current ditch they're working on. It's about the size of a football field, and he said something from three or four months ago would be about three or four feet down."

After he stopped mining Bitcoins in 2009, Howells hadn't given the currency much thought. "I hadn't kept up on Bitcoin, I'd been distracted. I'd had a couple of kids since then, I'd been doing the house up, and forgot about it until it was in the news again."

Howells considered retrieving the hard drive himself, but was told that "even for the police to find something, they need a team of 15 guys, two diggers, and all the personal protection equipment. So for me to fund that, it's not possible without the guarantee of money at the end." As such, he's resigned to never getting the virtual money back.

"There's a pot of gold there for someone … I'm even thinking of registering www.returnmybitcoin.com. It's available," he said. He has also set up a Bitcoin wallet for donations aimed at recovering the hard drive.

"If they were to offer me a share, fair enough," he said. "If they were to go out and find it for themselves … it's my mistake throwing the hard drive out, at the end of the day."

A spokeswoman from Newport council emphasised that any treasure hunters turning up to the landfill site wouldn't be allowed in, but "obviously, if it was easily retrieved, we'd return it."

"I'm at the point where it's either laugh about it or cry about it," Howells says. "Why aren't I out there with a shovel now? I think I'm just resigned to never being able to find it."

Nonetheless, he continues to believe, as he did four years ago, that Bitcoin is the future of money. "I still think it's going to go higher. I just think it's the next step of the internet, which is why I mined it in the first place. When I first came across it, I knew straight away. We had everything else at the time; Google, Facebook, they were already the market leaders in their areas. The only thing that was missing was an internet money."